EVERY YEAR Walter McIlhenny goes out to his fields with a handful of string and ties it to the best of his pepper plants. Those peppers are picked and stripped of their seeds, and those seeds are ceremonially placed in a bank box in nearby New Iberia, La. Thus begins next year's crop of Tabasco peppers for McIlhenny's Tabasco Pepper Sauce, just as it has begun every year for the last 115 years.

Actually, the McIlhennys have made one concession to modern life: the string is a contemporary imitation of the hanging moss that used to be draped on the chosen plants.

Not much else has changed in the last century on the family-owned salt mountain, Avery Island, which peeks above the Gulf Coast marshland ("wet enough to pour," say the McIlhennys). The mountain was discovered during the Civil War to be an earth-covered natural formation of rock salt as large as Mount Everest. Egrets roost and live oaks age and alligators share the jungles and lagoons with deer, bears and foxes. A few artfully concealed oil wells, a 12th-century Chinese buddha and up to 100,000 tourists a year have been added--still the Tabasco sauce is made pretty much the way it was when Edmund McIlhenny returned home after the Civil War to find his Mexican pepper plants nearly all that remained after the Yankee invasion.

A banker, bon vivant and tinkerer who particularly loved food, McIlhenny experimented with mashing these hot red peppers into a liquid essence, put it in cologne bottles with stoppers and green sealing wax, and sent his invention to a friend in New York. He called the peppers and the sauce Tabasco, which his great-grandson and company secretary Edmund McIlhenny translates as "land where the soil is hot and humid," and sold it wholesale for $1 a bottle.

The sales that first year, 1868, numbered 350; by 1872 they had grown enough to warrant opening a London office. Today the octagonal top is plastic and the green neckband foil, but the sauce is essentially the same; and annual sales have grown to 50 million of the 2-ounce size in the United States alone with no competition to speak of, not to mention the sales of 6 million bottles in Japan--the largest foreign user--and sales in nearly a hundred other countries.

"Over 50 percent of U.S. homes have a bottle on the shelf," boasts Paul McIlhenny, Edmund's cousin and company treasurer, who then switches to his aw-shucks tone and adds, "Our problem is to get them to use it."

Those seeds from the bank box are planted in greenhouses in the dead of winter, then in April transplanted outdoors. Not all on Avery Island, though. Only 5 percent of the peppers are grown on the island nowadays; those seeds, whose ancestors originally came from Mexico to be bred into the hottest of the commercially grown peppers (says Edmund, a rating of 9 for Tabasco would make cayenne a 5, jalapen o a 3 or 4), are now largely sent back to Mexico to be grown--as perennials rather than as annuals in more northern Louisiana--and mashed to McIlhenny specifications. As Paul McIlhenny put it, "If we didn't have Central American peppers we'd have to ration Tabasco."

McIlhenny now has factories in Toronto, Madrid, Caracas, Mexico City and outside London, spread thus because tariffs make it economically sensible; in 1978 President Carter signed a bill allowing duty-free importation of hot pepper mash from Mexico. Tabasco labels are now printed in English, French, Spanish, Italian, Swedish, Japanese, Greek and Chinese, and the company has even published a Chinese recipe book.

The peppers ripen from green to yellow to orange to red, when in late July or August they are picked by hand--only the ones red enough to fit the specifications--and taken to McIlhenny mashing stations to be ground that same day, mixed with salt and stored in white oak barrels--10,000 new ones a year, plus 1,500 restored ones--that are sealed with more salt. The proportion of salt--8 percent--is so critical to the aging and stabilizing that the McIlhennys send precisely measured amounts of Avery Island salt, mined from its massive salt core, in the barrels they ship to their foreign factories to assure its purity and therefore its strength.

For the next three years the mash is left in the barrels to ferment. Like wine? No, explains Edmund McIlhenny, like sauerkraut. While he doesn't think of Tabasco in terms of vintages, there are good years and bad years: 1980-81 was a tremendous crop, but the quality wasn't up to snuff, and three years later a lot of barrels had to be rejected.

At the end of the aging period, chairman of the board Walter McIlhenny, as he did for the seed stock, personally inspects each barrel of mash in the old-style brick building that seeps with pungency, shining an incandescent light into each barrel to check the color. Tabasco is one of very few commercial food products that is inspected only by color and smell. The company joke is that this liquid fire can't have tasters because they only last about two months; the pH level is their taster, says Paul McIlhenny.

By the time the mash has aged it has shrunk to fill about half of the barrels; it looks like seedy red sand and its color varies from red-gold to dark brick red. Edmund McIlhenny grins with the pleasure of sniffing these intensely aromatic barrelfuls; "I'm addicted to them," he says.

Next comes the blending with white distilled vinegar; the point is not the vinegar itself--it could just as well be sherry, he explains--but to have a medium that preserves the mash and transmits the flavor. Whereas once the mash and vinegar were stirred slowly by hand in the barrels and left to blend for 30 days, now the mixing is done in 2,000-gallon white oak vats, each of which holds 11 barrels of pepper mash and 1,000 gallons of vinegar. An electric circuit turns the mixers on at random moments over the 30 days.

By now it is a dark red liquid with swirls of darker oil threading along the surface. Next the seeds and skins are filtered out, through three progressively finer filters, the coarse remaining mash sold to spice manufacturers as oil of capsicum for such products as red-hot candies and Dentyne chewing gum. The liquid is bottled in replicas of the original perfume bottle, but now in 1/8-ounce promotional samples, 2-ounce regular, 5-ounce and 12-ounce institutional bottles. Experiments continue to try to perfect portion-controlled pouches to hold 1/4-teaspoon single servings; the first model wouldn't stand up under this volatile condiment, and the second would hold it but you couldn't cut the pouch. "We've been fighting it for 15 years," complained Paul McIlhenny.

With such corrosive substances as peppers, vinegar and salt for its mainstays, Tabasco production requires buildings of brick, mortar and wood, with plastic piping and epoxy-coated concrete floors. Tabasco's vinegar is twice as strong as the average, so proper ventilation is crucial. Even stainless steel and concrete can't stand up to the corrosive fumes, and airlocks are necessary to keep the fumes of the processing area from invading the packaging area. Taken internally, however, say the McIlhennys, that corrosiveness has been suggested by serious medical researchers as possibly beneficial for the sinuses and arteries.

Outside of those brick buildings the 2,500-acre Avery Island is many people's idea of a tropical paradise, with its jungles and bird sanctuary. Its population is about 1,000--Averys, McIlhennys and some employes--with a single company store where they can buy such staples as homemade boudin and gratons and po' boys as well as flour and bread. Walter McIlhenny believes in graceful living; every day the telephone switchboard to Avery Island closes for lunch, and often one of the McIlhenny boats meanders through the waterways with picnickers. Lunch with Walter McIlhenny is legendary, from its white-glove service to its infinite variety of gumbos.

While once the company canned oysters and shrimp and something called Creole Dinner, it long has been careful to preserve its solid conservative image of being an unchanging one-product company. Just Tabasco. Then bloody mary mix. Now it is experimenting with picante sauce but with some concern whether that might interfere with its quality image. This year the island's beehives have been moved to the pepper fields, so some day there might be Tabasco honey. And the company souvenir shop sells Tabasco earrings, T-shirts and silver bottle holders, the big seller lately being aprons emblazoned with the familiar red bottle.

Tabasco itself seems to be having boom times. "U.S. sales are very good," says Paul McIlhenny, though he doesn't know "whether we're that smart marketers or been pulled along in the Mexican food explosion." The highest per capita use of Tabasco, as one might expect, is in Louisiana; the largest volume is in California. Overseas, the Tabasco-happy Japanese use it on pizza and American foods, while Paul McIlhenny hasn't a clue what the West Germans--the second-largest-volume consumers--do with it. Those countries with hot food traditions are not especially good markets, since they are likely to grow their own hot peppers and produce their own hot sauces. The company expends plenty of effort--two law firms' worth--protecting its name from trademark infringement and its seeds from being smuggled off the island.

Not to mention the public relations push since the '60s, developing recipes for the product and promoting the fact that Tabasco has climbed the Himalayas and traveled in space with Skylab.

While a 2-ounce bottle lasts the average user a little less than a year, at Edmund McIlhenny's house it is finished in a couple of weeks, and that doesn't include the little bottle he carries with him for emergencies such as airline meals. The problem with selling Tabasco is, he says, that many people use it only once a year, as they use nutmeg only for egg nog and sherry for turtle soup. In its early days it was used primarily with oysters and clams, but nowadays chili-heads use it for everything short of--or even including--dessert. Thus the McIlhennys get two frequent complaints: the sauce has been watered, and the hole in the bottle is bigger. That means, says Edmund, that "they're not getting the flavor bounce" as they get used to the heat, and they increase the amount they use so the bottle doesn't go as far.

Is it addictive? Answers Paul McIlhenny: "Yeah. Thank God it is."

Here are the McIlhennys' tips on using Tabasco and recipes for some of its most basic uses:

* To dissipate the heat, use it in an oily base such as butter, oil or mayonnaise. In mayonnaise, for utmost flavor, you can use enough Tabasco to turn it pink, since the heat will be moderated by the oil.

* In cooking foods, add the Tabasco at the end.

* Tabasco blends better in thick soups or sauces than in watery ones.

* Try rolling fish fillets in Tabasco combined with egg and milk or water, then in seasoned flour before frying. Or combine mustard with Tabasco and coat fish with it, then dip in flour.

* "It's a natural" for eggs, says Paul McIlhenny; add two drops to fried, soft-boiled or scrambled eggs.

* As a table condiment it can be sprinkled on sandwiches, hamburgers, tuna salad or an already dressed salad.

* Edmund McIlhenny's grandfather added a dash of Tabasco to his Coca-Cola, but nobody nowadays was willing to recommend that. THE ROARING '20s BLOODY MARY (Makes 6 to 8 servings) 1 quart tomato juice 1/4 teaspoon Tabasco pepper sauce 4 teaspoons lime juice 3 teaspoons worcestershire sauce 1 teaspoon salt Vodka*

Combine all ingredients, except vodka, in pitcher; stir well. Pour over ice in glasses and stir in vodka. Garnish with lime or celery stalk.

*Note: Use 1 to 1 1/2 ounces vodka per serving. CLASSIC OMELET (2 servings) 6 eggs 2 tablespoons water 1/2 teaspoon Tabasco pepper sauce 1/4 teaspoon salt 2 tablespoons butter, divided 2 tablespoons grated parmesan cheese, divided, optional

Combine eggs in mixing bowl with water, Tabasco sauce and salt. Beat until well blended, but not until frothy. Melt 1 tablespoon of the butter in omelet pan over moderately high heat (pan is hot enough when drop of water spatters). Pour half of egg mixture into pan. Place left hand on pan handle with palm downward, moving pan in back-and-forth motion. Hold fork in right hand and stir eggs with a circular motion, letting flat of fork touch flat of pan without scraping. When omelet is cooked but still soft, reverse position of left hand so palm is upward. Sprinkle omelet with 1 tablespoon grated cheese, or desired filling. Tip pan and roll omelet out onto hot plate. Repeat with remaining egg mixture, butter and cheese for second omelet.

Filling possibilities:

Bacon and cheese: Use 1 slice cooked bacon, crumbled, and 1 tablespoon shredded swiss cheese per omelet.

Seafood: Use 2 tablespoons minced cooked lobster, crab or shrimp per omelet.

Fines herbes: Use 2 tablespoons of equal parts of chopped fresh parsley, tarragon and chives per omelet. Add to egg mixture before making omelet. FLAVORED LOAF (Makes 1 loaf) 1/4 cup soft butter 1 tablespoon very finely chopped onion 1/2 teaspoon Tabasco pepper sauce 1 small French loaf Mix butter, onion and Tabasco sauce. Cut French loaf into thin slices and spread with Tabasco sauce mixture. Wrap loaf in foil and heat through. Serve hot.